[LONDON] Brent crude oil fell back towards $54 a barrel on Thursday after Kuwait said Opec had no choice but to keep production steady, refocusing the market on global oversupply.
Brent had rallied by more than US$2 a barrel on Wednesday after the Federal Reserve indicated it would raise US interest rates slower than previously thought, overshadowing data showing US crude stocks at a record level.
The dollar fell by its most in six years after the comments from the Fed, boosting oil and metals priced in the greenback as they became cheaper for holders of other currencies. But on Thursday, the dollar snapped back by more than 1.5 per cent .
Brent for May delivery was down US$1.41 at US$54.49 a barrel by 1421 GMT, having hit a low for the session of US$54.07 and after rising almost 4.5 per cent on Wednesday. Brent fell from highs above US$115 last June to near US$45 in January.
US crude for April delivery fell by US$1.45 or 3 per cent to US$43.21 a barrel, close to a six-year low as the contract heads for expiry on Friday. The May contract was down US$1.39 at US$45.26 a barrel, with its discount to Brent near US$9.30.
Kuwait's oil minister said on Thursday he was concerned by the 50 per cent drop in oil prices since June, but said Opec had no choice but to keep output steady. "We don't want to lose our share in the market," Ali al-Omair told reporters.
The Organization of the Petroleum Exporting Countries decided in November to maintain production levels even if it meant lower prices, as the group feared fast-growing US shale output threatened its position.
While higher-cost US production is expected eventually to be slowed by the drop in price, so far output has continued to rise, boosting crude inventories to their highest-ever level.
US crude stocks rose by a further 9.6 million barrels to the highest on record last week.
On Thursday data showed the number of Americans filing new claims for unemployment benefits rose only modestly last week, indicating the labour market remained on solid footing, even amid some signs of a slowing economy.
At nuclear talks in Lausanne, six major powers and Iran remained far apart, a European negotiator said on Thursday. Any deal around Iran's nuclear programme could see sanctions gradually lifted, adding up to 1 million barrels of oil supply to the market.